AUSTRALIA: An Introduction to Competition/Antitrust

Australian competition and consumer law is undergoing a period of intense and dynamic change, affecting merger clearance, enforcement risks and consumer protection.

An Overhaul of Australia’s Merger Regime Commences on 1 July 2025

During 2024, Australia experienced the most significant rewrite of its merger laws in 50 years. The new regime will commence on 1 July 2025 and operate in parallel with the current, informal clearance process until the end of the year. The new process will then become mandatory for all deals that satisfy notification thresholds, effective from 1 January 2026.

The changes have significant implications, including:

• the introduction of filing thresholds that look likely to catch a wider set of deals with an explicit focus on incremental or “bolt-on” acquisitions in concentrated markets;
• a broadening of the class of asset deals that are caught;
• new process and filing requirements which are likely to increase the upfront cost and information requirements for merger parties;
• mandatory timeframes will become applicable to the Australian Competition and Consumer Commission (ACCC);
• greater transparency through a public register of notified transactions; and
• significant changes in review rights, with a shift from a judicial enforcement model to the ACCCC as administrative decision-maker subject to limited merits review in the Australian Competition Tribunal.

What is clear is that the new rules will expand the number of deals caught and the level of work and cost required for clearing most transactions, including Australian aspects of global deals. The process itself also looks likely to involve a different and new model of engagement with the ACCC, including a more automated process with greater upfront demands for data and evidence.

Transitional arrangements are relatively limited and so parties face a critical strategic decision in relation to deals during the year, when both regimes will operate in parallel.

Complex Deals in Australia Subject to Longer and Tougher Scrutiny

Even prior to the introduction of the new merger rules, complex deals have faced a more challenging environment in Australia. This was especially the case for deals involving vertical relationships, bolt-ons, transactions with “ecosystem” concerns or those in sensitive industries. 2024 saw the highest proportion of merger deals pushed into Stage 2 in over a decade (45% of publicly reviewed mergers) and the highest proportion blocked or withdrawn following ACCC opposition (40% of publicly reviewed mergers).  

To some extent, this also reflected greater toughness by the ACCC around remedies. Where mergers threw up concerns, the ACCC was more likely to prefer a divestiture remedy and only one partly behavioural undertaking was accepted during 2024 (in Sigma/Chemist Warehouse).

ACCC Enforcement Focussed on Consumer Protection and Market Reviews

Australia has a fused competition and consumer regulatory regime, with the ACCC responsible for enforcement of both antitrust and consumer protection law.

The level of overall court enforcement has drifted down over recent years and the ACCC commenced only a single competition law prosecution last year. To some extent this reflects the ACCC being tasked by the Australian government with a range of market reviews and other types of regulatory intervention that have consumed ACCC staff and other resources. Indeed, the ACCC directly monitors, reviews or regulates over 20 different sectors of the Australian economy – a number that has doubled over the last decade.

Sustained inflation and the resulting cost-of-living-crisis has been a key issue in Australia, as elsewhere, and this has guided the recent enforcement priorities of the ACCC. Where it has taken cases, these have most often been consumer law prosecutions focused on pricing behaviour and misleading marketing practices.

While the number of investigations and cases may have fallen, the same cannot be said for penalties. During 2024, the ACCC achieved the largest consumer penalty yet levied when Australia’s flag carrier Qantas agreed to a AUD100 million penalty (plus AUD20 million in consumer compensation) in settlement of proceedings into the sale of cancelled flights during the post-COVID period.

Growing Risks from Private Litigation and Class Actions

Australia’s unilateral market power prohibition was reframed in 2017 to introduce an “effects test” and remove other perceived limitations on enforcement, in a move widely seen to lower the threshold for prosecution. Since that time, Australia has seen a ramp-up in private litigation with 16 cases brought before the courts (only two of which involve the ACCC). This compares to the period prior to the changes, when there had not been any material private litigation under Section 46 of the Companies Act 1998 for at least a decade and only three cases commenced by the ACCC since 2012.

The highest profile examples during 2024 were the aptly titled Epic cases, involving Epic’s claims against Apple and Google, each coupled with follow-on class actions. There were a range of other dominance cases commenced, discontinued or heard during the year including a class action against Google in relation to its ad tech services (Q News and Sydney Times v Google).

Representative proceedings (or class actions) are also playing a growing role in Australia with a string of class actions commenced against high profile targets under both consumer protection and competition law over the last couple of years.

Consumer Law and Prohibiting “Unfair” Conduct

Australia already has some of the broadest and toughest consumer protection rules in the world.

However, they look likely to get even tougher in 2025. The ACCC has long argued for a broad prohibition to be introduced in relation to “unfair” conduct to complement existing rules against misleading conduct and unconscionability. While many question whether a gap exists that warrants the changes – the coming year may nonetheless be the year that it arrives with a consultation paper released in late 2024 floating options for a general prohibition on unfair conduct.

While this will extend across the economy, the regime is squarely aimed at online marketing practices, such as subscription traps, dark patterns and some drip or dynamic pricing practices. If this proposal becomes law, we expect those markets to be the focus of some early ACCC test cases.

What Does It All Mean for 2025?

We face a period of fast-moving and disruptive change in Australia, with new merger laws and a potentially significant expansion of consumer law.

All of this is occurring against the backdrop of the ACCC continuing to play a wide, market-monitoring role across swathes of the economy and with a more complex litigation environment featuring growth in private enforcement under the unilateral power prohibition, activist litigation and class actions.